BRITAIN’S infamously concentrated current account market will gain a new competitor this year as the Post Office at last enters the sector.
More than a 150 years after opening up to financial services as a savings bank, the state-owned institution will at last open the standard bank account.
The firm hopes its enormous branch network – it has 11,500 outlets, more than all other banks combined – will give it a strong start right across the country.
The lender already has close to 3m members and a savings book of £17bn.
After trials from this Spring, the group hopes to roll out the service across the UK next year.
“We’ve carried out extensive research into the current account market and the findings tell us that customers want simplicity, transparency and good value for money,” said the firm’s financial services director Nick Kennett.
“The Post Office is undertaking a significant transformation, providing more and more essential services to our customers across mails, government and financial services. The introduction of the current account is a further statement of this ambition.”
Earlier this year an Office of Fair Trading study found around 75 per cent of the current account market was taken by the big four providers – Lloyds, RBS, Barclays and HSBC.
It expressed concern that new lenders like Metro Bank and M&S were too small currently to significantly challenge that market dominance.
One historic barrier to entry has been the difficulty of competing with large branch networks, something the Post Office has little trouble with.
However it has not yet revealed whether the services will provide free in-credit banking, or whether customers will have to pay for accounts.